Student loan rates to double

Friday

Jun 28, 2013 at 12:01 AMJun 28, 2013 at 11:34 PM

Local college students will see their subsidized student loan costs double on Monday, unless Congress takes action.

Sydni DunnStaff Writer

Local college students will see their subsidized student loan costs double on Monday, unless Congress takes action.Student loan interest rates are set to go from 3.4 percent to 6.8 percent. The hike affects students who take out new subsidized Stafford loans, the most common need-based federal student loan. About 46 percent of Louisiana students have this type of loan.Brandy St. Pierre, assistant director of financial aid and university scholarships at Nicholls State University in Thibodaux, said Stafford loans are popular because the government pays the loan’s interest when the student takes more than six credit hours a semester. The financial responsibility shifts to the student six months after graduation, she said. The interest rate is fixed per academic year.The rise in the interest rate could yield serious consequences for college students and their families, said U.S. Sen. Mary Landrieu, D-La., a critic of the increase.Landrieu was a co-sponsor of the “Keep Student Loans Affordable Act,” which designed to extend the current 3.4 percent rate for one year until the government could figure out a cheaper alternative for students.Democrats and Republicans remain divided on whether to cap the interest rate students pay after graduation and whether the government should use the profit from loans to reduce the federal deficit. Congress was unable to strike an agreement on the extension last week, meaning any potential compromise will have to be handled retroactively following the week-long July 4 recess. “I’m committed to working with my colleagues to prevent these rates from doubling and keep college affordable,” Landrieu told a group of Louisiana college students during a phone conference Wednesday.The three students — from McNeese State University, Louisiana State University and Southern University — also agreed to rally against the increase. Davante Lewis, a political science senior at McNeese, said if Congress does not act, new graduates will suffer.“These loans are not just a piggy bank for students; they are an educational opportunity,” Lewis said. “Instead of getting a dream when you get a degree, you get debt.”Brandi Boyd, a mass communication junior at Southern, said she is already worried about finding a job after college. The increased cost of her loans will be an added stress.Nationally, student loan debt exceeds $1 trillion, Landrieu said. In Louisiana, the average student loan debt is now $22,921. And as college tuition and fees increase, St. Pierre said, so will the amount borrowed.“Because of the economy, they need loans to help pay the rising tuition,” she said. “This change should make students more conscious of how much they’re borrowing.”